IBM Cuts More Than 3,000 Jobs, Workers Claim

Big Blue is shedding positions in software, sales, research, and other departments, an employee group says.
IBM has laid off roughly 3,000 U.S. workers over the past several days, according to an employee group that's affiliated with the Communications Workers of America.

Since the beginning of the month, IBM has cut 1,419 workers in its software division, and 1,449 workers in its sales and distribution arms, according to [email protected] The group also claimed that IBM is in the process of laying off workers in its slumping Systems and Technology computer hardware group.

"Cuts in other divisions expected," [email protected] stated on its Web site.

An individual who identified himself on the group's Web site as a Systems and Technology worker wrote on Tuesday that "today is the day" for cuts in his unit. Another poster who claimed to be an employee said IBM plans to eliminate 200 positions from its research group.

An IBM spokesman couldn't immediately be reached. The company typically doesn't comment on layoffs.

Update @12:40 pm: An IBM spokesman confirmed that the company is eliminating jobs, but declined to provide specific numbers. Federal laws require employers to disclose layoffs if they cut 500 or more workers from a single site. IBM employs about 400,000 workers worldwide.

Tech companies in recent days have joined the ranks of other large multinationals, such as Caterpillar and Pfizer, shedding jobs by the thousands to cope with the recession. Last week, Microsoft announced that it would ax 5,000 full-time jobs and 5,000 contract positions. Texas Instruments on Monday said it would eliminate 3,400 jobs.

IBM earlier this month reported mixed fourth-quarter results.

Sales fell 6.4% year over year to $27 billion, while earnings per share rose 17% to $3.28 and net income jumped 12% to $4.43 billion. The earnings beat Wall Street expectations. Analysts surveyed by Thomson Reuters were, on average, expecting Big Blue to post fourth-quarter EPS of $3.03.

Still, the economic slowdown is taking its toll on IBM's top line. Only the company's software group managed to increase sales in the fourth quarter. The unit's revenue increased 2.6% to $6.4 billion. The key IT and business services groups saw sales fall by 3.7% and 4.5%, respectively.

Hardest hit was the Systems and Technology group, where overall quarterly revenue fell 20% and sales of Intel-based servers plunged 32%. For the fiscal year 2009, IBM said it expects to post earnings per share of at least $9.20, ahead of analysts' expectations of $8.75 for the year.

IBM shares were off 0.56% to $91.09 in midmorning trading Tuesday.

Editor's Choice
Mary E. Shacklett, President of Transworld Data
James M. Connolly, Contributing Editor and Writer